Analysis
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More Than Half Of Homes Are Selling For More Than Their List Price |
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 This might surprise you. It surprised me! More than half (52%) of homes that sold in the first half of 2020 sold for MORE than their list price! It is certainly true that we have seen buyers being able to negotiate less and less over the past few years as the market has become tighter in many price ranges and locations -- and this is some specific evidence that now many buyers aren't able to negotiate at all! Plenty of caveats, of course...
Anyhow, regardless of how you slice the data, the market is hot in many price ranges and buyers are often finding themselves needing to be prepared to pay the full list price or even a bit higher to secure a contract on a home! | |
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Highest Monthly Pace of Contracts in Over 10 Years |
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 To say June 2020 was a busy month of contract activity is a bit of an understatement. A total of 175 properties went under contract in June, which was more than any other month in the past 10 years! Some of the previous high months were...
Read more about our local real estate market in my most recent monthly market report. | |
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Harrisonburg Area Home Prices Up Nearly 7% in First Half of 2020 |
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 Happy Tax Day! Yes, that's right, today is the extended deadline for filing and paying income taxes. But the day is still young, so read on for an update on our local housing market before you go submit your tax filing. ;-) But first -- check out this recent listing (shown above) in Highland Park priced at $365K by visiting 4065LucyLongDrive.com. Two other notes before we get started...
OK, now, on to the data...  We're now officially halfway through the year when looking at year-to-date sales figures and there is plenty of interesting trends to note above...
Now, let's take a brief look at detached homes compared to attached homes. Attached homes includes duplexes, townhomes and condos.  As shown above...
So, prices have risen quite a bit between 2019 and 2020 even without much of an increase (actually a slight decrease) in the number of homes that are selling. But perhaps the trend in the pace of home sales is shifting...  If you look at the four numbers I circled in gold above, you'll see that May 2020 home sales were drastically lower than May 2019 -- but the gap between June 2020 and June 2019 was not as severe. Perhaps we are starting to see home sales pick back up again? At least some of the (slight) decline in home sales in 2020 seemed to be a result of fewer would-be home sellers listing their homes for sale which gave would-be home buyers fewer options for buying. Now, looking at some longer term trends...  The data above looks at a moving 12-month set of data, and we're seeing divergent trends now. The median sales price (green line) keeps on steadily rising -- while the annual pace of home sales (orange line) has been drifting downward over the past three months. As noted above, fewer sales seems likely to be a result of fewer sellers being willing to sell and not fewer buyers being willing to buy -- which would at least partially explain why prices keep on rising. All of this means that is definitely still a STRONG seller's market...  As shown above, the number of buyers buying in the market has stayed rather steady over the past few years (though it has dropped off a bit over the past few months) while the number of sellers selling (inventory at any given time) continues to decline. This makes it an absolutely wonderful time to be a seller -- and probably a not very fun time at all to be a buyer. And, well, if you need to do both (sell and buy) you'll be both ecstatic and depressed! This next stat might surprise you...  I did not see this one coming! I'll dive a bit deeper into this in the coming days, but it seems that the median "list price to sales price ratio" has risen to 100% in 2020! That means that half of sellers are selling below their list price and half of sellers are selling ABOVE their list price!? I knew sellers were having to negotiate less and less on price -- but this statistic is still rather shocking. Again, I'll dive deeper into the data in coming days to see what else I can uncover here. And set your coffee cup back down, because here's another surprise for you...  Contract activity in the first five months of the year was lagging behind this year (-5%) as compared to last year. But when we factor in June contracts, not such much! Now there have been 3% more contracts in 2020 than in the same timeframe in 2019, mostly because of the astonishingly high 175 contracts signed in June 2020! Wow! Again, I'll break this down further over the next few days to try to better understand this spike in contract activity. And as is likely NO surprise, inventory levels keep on dropping...  There are currently only 214 homes for sale in Harrisonburg and Rockingham County -- which is 20% lower than where we were a year ago. I was hopeful that we'd see inventory levels pick up a bit during the spring -- which didn't really happen. Maybe we'll see some late summer, early fall increases?? Finally, on to this super low, historically low, ridiculously low interest rates...  Buyers financing their home purchases over the past few months have enjoyed some absurdly low mortgage interest rates. The current average is 3.13%, which is the lowest EVER and I've even had some buyer clients pay a point or so to get under 3% -- on a 30 year fixed rate mortgage! Wow! OK - that about wraps up my monthly run down of what is happening in our local real estate market. Stay tuned over the next few days for some deeper analysis of some of the trends as mentioned above. If you have questions about what I have discussed, or about other market trends you are observing, shoot me an email. Otherwise, until next time...
Finally... if you're thinking about buying soon, or selling soon, and are looking for a Realtor to assist you with that process - I'd be happy to connect with you at your convenience. You can reach me most easily at scott@HarrisonburgHousingToday.com or by calling/texting me at 540-578-0102. Have a great second half of the first month of the second half of the year! :-) | |
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Sales Activity Was Slowing For Two Months But Has Picked Back Up Again |
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 The first few months of 2020 were strong -- stronger than 2019 and seeming to indicate that 2020 was going to be a solid year of local home sales. And then, COVID-19. Contract activity started to decline in March -- and by April 18, the number of contracts signed in 2020 had fallen behind the number signed during the same timeframe in 2019. So, it seemed that COVID-19 might at least somewhat slow down our local real estate market. But, then June! During the month of June, contract activity steadily ramped up, and by June 19th the cumulative number of contracts signed in 2020 (Jan 1 - Jun 19) had pulled back ahead of the same timeframe in 2019. So, it seems that COVID-19 might not lead to a net decline in the amount of home sales activity in Harrisonburg and Rockingham County! | |
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Home Buyers In 2020 Are Locking In Ridiculously Low Mortgage Interest Rates |
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 If there is one trend line that we like to see declining -- it's mortgage interest rates! :-) The interest rates at which buyers are financing their mortgages have been lower and lower and lower as we have progressed through 2020, and are now right around 3.13%. If you are thinking about buying a home in 2020 and IF you can secure a contract on a house despite LOTS of competition from other buyers, you are likely to be financing your mortgage at one of the lowest mortgage interest rates ever seen! Perhaps that is fueling some of surge of buyers currently in the market? | |
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This Could Be A Good Time To Sell A Townhouse Under $200K, Built Since 2000, In The City of Harrisonburg |
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 If you have a townhouse to sell in the City of Harrisonburg, built in the past 20 years, that would be priced under $200K, this may be an excellent time to sell it. Here's why... Over the past three months, there have been (15) sales of such townhouses -- so, around (5) buyers per month are buying townhouses built in the past 20 years, priced under $200K in the City of Harrisonburg. Not surprisingly, then, there are (9) such townhouses currently under contract. But wait, what!? There is only (1) single solitary townhouse for sale in the City of Harrisonburg under $200K right now that was built in the past 20 years. So -- if you own a townhome in Avalon Woods, Beacon Hill, Harmony Heights, Liberty Square, etc. -- this might be an excellent time to sell. Email me to chat about your townhouse and its value in the current market. | |
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Contracts Shoot Skyward In June, Sort Of Like Fireworks |
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 After three months in a row (March, April, May) of slow contract activity (compared to last year) the pace of contracts being signed shot skyward in June to easily eclipse last June, as well as March, April and May of both years! This is a good indicator that we are not likely to see much of an impact on our local real estate market based on COVID, other than that it affected the timing of when these sales (contracts) were coming together. Contracts came together much later than usual this year. Happy Independence Day! | |
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Pace of 2020 Buyer Activity Recovers During June |
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 Remember where we were back at the beginning of June? Home buyer activity was lagging behind in Harrisonburg and Rockingham County -- with 2020 buyer activity (ratified contracts) down 5.44% as compared to 2019. Not any longer! As of the end of last week, there have been 1.11% more contracts signed in 2020 as compared to 2019. So - the Spring was slower and stranger than usual, but it appears that 2020 may turn out to be an even stronger year than 2019 for home buyer activity in our local area. | |
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Boom, Just Like That, 2020 Buying Activity Is On Par With 2019 Trend |
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 Buyer activity has been lagging this year -- in fact just a few weeks ago there were 5.5% fewer contracts signed in 2020 as compared to 2019. But, not any longer! As of the end of the day yesterday (June 18) the pace of buying activity in 2020 is right back on track with 2019. OK, fine, less one home. Jan 1, 2019 - Jun 18, 2019 Contracts = 695 Jan 1, 2020 - Jun 18, 2020 Contracts = 694 It seems that COVID-19 might have even less of an impact on overall market activity than I had thought. Stay tuned to see if 2020 will cross over to surpass 2019 in the coming weeks. | |
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Having Difficulty Finding Homes Under $200K? Here Is Why! |
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 The blue line shown above is showing you the change in the number of homes for sale under $200K in Harrisonburg and Rockingham County. As you can see, this segment of our housing market has offered fewer and fewer choices at any given time over the past few years. Some further explanation and caveats...
So, if you are having difficulty finding a home to buy under $200K, maybe now you can see why you are having this experience! Be ready to pounce on any new listing of interest and you better already have a pre-approval letter in hand from your lender! | |
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Local Home Prices Still Rising Despite Slightly Fewer Home Sales |
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 Happy Monday Morning! We're nearly halfway through the year now, and it has been a year like no other when it comes to our local real estate market and in so many other ways. Read on for an overview of our local housing market, or click here to download a 28-page PDF with all of the latest local housing market trends. But before we dive into the data, take a few minutes to check out this custom-built cedar log home on 2.81 acres one mile from Sentara RMH by visiting 3193TaylorSpringLane.com. Now, on to the data...  So much to point out here as this has been anything but a "normal" year...
OK - that was a lot of words to absorb - let's get to more visuals and fewer words. Relax and sip your coffee as you scroll through the following trends - knowing you'll be smarter, even if a bit more confused, by the time you get to the bottom of this overview...  This has been a year of bests and worsts! Home sales were on fire in January and March (best months ever) and were dreadfully slow in February, April and May (worst months ever) - leaving no clear indication of whether we should be extraordinarily excited or depressed about 2020. Maybe we are experiencing this same dichotomy as we think about other aspects of 2020 as well!? :-) But when viewing these bests and worsts piled on top of each other...  The positive impact of the strong months (Jan/Mar) have almost entirely made up for drag of the slow months (Feb/Apr/May) bringing our year-to-date total of home sales up to 479 -- only slightly behind where we were a year ago. But even if those year-to-date numbers are rosy, the most recent two months of slower sales do impact the longer-term trajectory...  We can get excited about the top graph above -- in green -- as the median sales price is definitely still on the rise. The bottom graph (above, in orange) does show that the annual pace of buyer activity is starting to decline based on slower than normal sales in April and May. We may yet see this bounce back up depending on how June and July and August go, so stay tuned... And speaking of how future sales will go -- we ought to take a look at contract activity...  Contract activity is (clearly) a leading indicator for closed sales. Above you'll note that March and April of 2020 (116, 120) were much slower than last year (132,158) but we did see an increase in May contract activity. If we continue to see another increase in contract activity in June, then perhaps the surge of contracts being signed will just have been later in 2020 than in most other years. And if you're wondering why contract activity has been lower than usual, here is one reason for it...  Inventory levels (the number of homes on the market for sale at any given point in time) continue to decline. As such, buyers are finding fewer (and fewer) options of homes to buy. This has been a steady trend (lower inventory levels) over the past few years and the fact that inventory levels are still dropping tells me that slower sales is a result of fewer sellers selling more than a result of fewer buyers buying. The speed at which homes sell also reinforces that conclusion...  As shown above, two out of three homes are under contract within one month of hitting the market for sale. Beyond that, the median days on market for all homes that have sold in the past year -- was 15 days! So, there are fewer homes for sale at any given time, and homes are selling more quickly than ever -- indicating that buyers are still out there ready to buy -- we just need some sellers ready and willing to sell! And finally, some big picture economic indicators that are great and awful...  We are experiencing the lowest mortgage interest rates -- ever! Several of my buyer clients have locked in 30 year fixed mortgage interest rates below 3% (paying a point) but even without paying a point, the average rate at the end of May was only 3.15%! Yet at the same time, the unemployment rate (which had been trending lower and lower and lower) shot up from 2 point something up to 10.8% in April. This is likely at least somewhat temporary - and seems to affect folks renting homes more than those buying homes - but it is still not a great indicator of the health of our local economy. I'll be following this trajectory close over the next few months. OK - that brings your Monday morning snapshot of our local housing market to a close. And yes, I'll forgive you if you didn't get around to reading this until some other time than Monday morning. A few quick out takeaways...
If you're thinking about buying soon, or selling soon, let me know if you'd like to chat more specifically about your situation and goals. I'd be happy to help you with our potential purchase or sale. You can reach me most easily at scott@HarrisonburgHousingToday.com or by calling/texting me at 540-578-0102. Have a great week! | |
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Gap In 2020 Home Buyer Activity Starting To Close? |
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 Welcome to June! It seems that the pace of home buying activity might (??) be starting to pick back up again during June...
Give it a few more weeks to know for sure, but it seems that slightly more buying (and selling) is happening as we have started rolling through June. | |
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Harrisonburg Area Home Sales Slow In May |
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 A bit later this week I'll take a full look at our local housing market and publish my full market report. Before I get to that, though, I thought I'd take a quick peek at the pace of sales in May. As you can see above...
Stay tuned for further analysis of our local housing market, but yes, home sales did slow down quite a bit in May. | |
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At Start of Phase Two the Pace of 2020 Contract Signing Is Still Slowing |
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 Welcome to Phase 2 in Virginia, folks! :-) Here's a quick summary of what is changing...
So, how about it, home sellers -- are you ready to put your homes on the market? I am confident we'll have very few 50+ person showings... ;-) As shown above, the pace of home buying (contract signing) has slowed over the past month.
I have theorized for a few weeks now that this slow down in buyer activity is a result of fewer sellers being ready to sell as opposed to fewer buyers being willing or able to buy. If that is the case, will this new phase mean more sellers will sell and thus more buyers will buy and thus that we'll see the 2020 trajectory start to catch back up with 2019? Maybe. We'll wait and watch and see together. Happy Friday! | |
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High End Home Sales (Incredibly) Strong In 2019 |
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 High end home sales (over $600K per this analysis) have been quite strong over the past five years. To put it into context...
Also of interest is if we look at an even higher price point...  The graph above shows home sales over $750K and as is evident, we usually see only 1 or 2 home sales per year in this price range -- but in 2015 that surged to 8 home sales, and last year it surged again, up to 10 home sales! I suppose it is also important to note that these price ranges are a small portion of our local housing market. In 2019...
Thus far in 2020, this high end segment of the market (over $600K) seems to be performing similarly to 2019 -- though the $750K+ market seems to be returning to normal level after an extraordinarily strong 2019. | |
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The Drop Off In Real Estate Activity Has Not Been Drastic |
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 In talking to my dad yesterday, he reflected that it seemed like the drop off in real estate activity had not been drastic. I agreed. We have seen somewhat of a decline in real estate activity (buyers buying, sellers selling) but it has not been nearly as significant as I thought it would be a few months ago when COVID-19 started having more of an impact on our daily lives. I've been taking a look at cumulative buyer activity each week for the past month or so to see how local market dynamics are changing. As shown above...
So, yes, buyer activity has dropped off a bit in 2020 - but it has not been drastic. | |
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Homes Have Never Sold Faster Than They Are Selling Right Now! |
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 OK, admittedly, I was only able to look back 20 years -- but still -- I think it is fair to say that... Homes Have Never Sold Faster Than They Are Selling Right Now! As you can see after the real estate boom of 2003 to 2006, the time it took for homes to sell (median days on market) got to be as high as four (plus) months and stayed there between 2008 and 2011. Since that time, homes have been selling faster and faster -- largely due to the demand for housing increasing steadily and the supply of homes declining steadily. In 2018, the median days on market dropped below one month -- and it has continued to decline in 2019 and 2020. The current "17 days" in 2020 means that half of the homes that sell in Harrisonburg and Rockingham County are under contract within 17 days of being listed for sale -- and the other half of the homes that sell take longer than 17 days. It is certainly a fast paced world we live in these days! Buyers have to be ready to move quickly when a new listing of interest hits the market! | |
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Monthly Housing Costs Decline A Bit In 2020 Thanks To Record Low Mortgage Interest Rates |
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 The monthly cost of a mortgage on a median priced house has actually declined a bit this year! For this analysis, I am measuring "monthly housing cost" by determining the mortgage payment amount (principal, interest, taxes and insurance) for a median priced home in Harrisonburg and Rockingham County, if a buyer were financing 80% of the purchase price and paying Harrisonburg real estate taxes. Over the past year...
So, even though prices are higher now than over the past two years, the monthly housing cost for financing 80% of the purchase of a median priced home has actually declined. | |
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Home Buyers Keep On Buying |
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 You almost have to squint to see major differences between the trajectory of each of these lines over the past few years. The three lines above are showing the cumulative number of buyers signing contracts at any given point in the year. Looking back to the middle of March, just when we were starting to see effects of COVID-19 on our daily lives, the pace of contract activity in 2020 was ahead of the past two years... Jan 1, 2020 - Mar 15, 2020 = 265 contracts Jan 1, 2019 - Mar 15, 2019 = 242 contracts Thus, as of March 15, buyers were 9.5% ahead of last year's pace. Now, two thirds of the way through May, things have flipped flopped... Jan 1, 2020 - May 20, 2020 = 536 contracts Jan 1, 2019 - May 20, 2019 = 565 contracts Thus, as of May 20, buyers are 5% behind last year's pace. So... 1. Home buyer activity has slowed in 2020 over the past two months. 2. Home buying activity in 2020 is only 5% behind last year! I expect we'll see things start to speed back up at some point -- but it hasn't seemed to have started yet... | |
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Inventory Changes Can Reveal Reasons For Fewer Home Sales |
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 Contract activity is slowing, a bit, and that will likely eventually lead to fewer sales -- that is to say fewer sales in 2020-YTD than in 2019-YTD. So, if we get to that point, perhaps in July 2020, what shall we conclude about the state of our local housing market if we're seeing fewer home sales this year than last? After all, we have been seeing relatively steady increases in the number of homes sales for almost 10 years now! I think inventory trends (at such a future date) will help reveal the reason for fewer home sales. If fewer home sales are accompanied by rising inventory levels... that will indicate that more sellers want to sell their homes than there are buyers who want to buy homes. That will mean that the market is softening and it will become less of a seller's market than in the past. If fewer home sales are accompanied by steady or declining inventory levels... that will indicate that fewer sellers want to sell their homes and the buyers are still there wanting to buy homes. That will mean that the market is staying strong with sustained buyer interest despite an interruption in the flow of sellers willing to sell. So -- fewer home sales could mean two very different things -- and thus far, it's seeming that it's the second scenario -- fewer sellers willing to sell despite a consistent pool of buyers ready to buy. | |
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Scott Rogers
Funkhouser Real
Estate Group
540-578-0102
scott@funkhousergroup.com
Licensed in the
Commonwealth of Virginia
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